BHP head of minerals in Australia, Mike Henry, has hit back against WA Nationals leader Brendon Grylls’ mining tax proposal which would make WA the highest iron ore tax region in the world.

Grylls proposed a tax on both BHP Billiton and Rio Tinto’s iron ore operations to assist with the state’s budget deficit.

The current scheme involves a 25 cent per tonne production rental fee per on iron ore, which, if the proposed tax is approved, could increase to $5 a tonne, adding around $1.5 billion in revenue for the state, and lift mining costs to around $20 per tonne.

Henry said the proposed tax would affect investment and create job losses, the ABC reports.

“It would also impact our suppliers, our ability to invest in other infrastructure and communities, and our overall economic contribution to the country,” he said.

“We will continue to oppose it and to support ongoing policy stability.”

His comments were echoed by the Minerals Council of Australia (MCA), with chief executive Brendan Pearson who also rejected the proposed tax.

This would be on top of the state’s already high tax fees, with a study of national corporate taxation regimes – led by Dr. Jack Mintz from the University of Calgary, Canada – finding that WA already imposes the world’s the largest royalty burden. It also found that the new tax would effectively double the overall royalty rate in WA on iron ore.

Henry called the tax discriminatory, adding that it “would be a bad policy”.

“The proposal suggests a lack of understanding of the facts and the damage such policy would trigger for industry, for WA and for the nation,” he said.

He added that the proposal suggested they only pay a 25c per tonne rental fee when, in reality, the last financial year the state’s iron ore total royalty and income tax contribution to both state and federal government was $17.50 per tonne. The state’s iron ore sector also paid $1.3 billion in royalties alone, The West reports.